(CNSNews.com) - During a rally in Springfield, Mo., President Donald Trump called on Congress to reform the U.S. tax code, including the business tax, saying it puts American companies at a disadvantage compared to countries like China, the United Kingdom, and Canada, which have lower corporate tax rates.
The United States is “dead last” when it comes to the business tax, the president said.
“We have gone from a tax rate that is lower than our economic competitors, to one that is more than 60 percent higher. We have totally surrendered our competitive edge to other countries. We have totally surrendered. We're not surrendering anymore,” he said.
The United States has the highest corporate rate among the 35 advanced economies in the Organisation for Economic Co-Operation and Development, according to a White House fact sheet. China, the U.K., Germany, Canada, and Australia all have lower corporate tax rates than the U.S.
Trump called for reducing the business tax rate down to 15 percent, “which would make our tax rate lower than most countries, but still, by no means the lowest, unfortunately, in the world, but it would make us highly competitive.”
“In other words, foreign companies have more than a 60 percent tax advantage over American companies. They can pay their workers more, sell their products and services at lower cost, and still make more money than their U.S. competitors,” Trump said.
The president said the U.S. tax code must be “simple, fair, and easy to understand,” which “means getting rid of the loopholes and complexity that primarily benefit the wealthiest Americans and special interests.”
The last major tax rewrite was 31 years ago and “eliminated dozens of loopholes and special interest tax breaks, reduced the number of tax brackets from 15 to two and lowered tax rates for both individuals and businesses,” Trump said.
“Since then, our tax laws have tripled in size, and the tax code itself now spans more than 2,600 pages, and most of it is not understandable. Tax rates have increased, and special interest loopholes have crept back into the system. The tax code is now a massive source of complexity and frustration for tens of millions of Americans,” he said.
The president called the tax code complexity “very unfair,” saying it “disadvantages ordinary Americans who don’t have an army of accountants while benefiting deep pocketed special interests.”
The president outlined four principles for tax reform.
“First and foremost, our tax system should benefit loyal, hard-working Americans and their families, and that is why tax reform must dramatically simplify the tax code, eliminate special interest loopholes … and allow the vast majority of our citizens to file their taxes on a single simple page without having to hire an accountant,” he said.
“Second, we need a competitive tax code that creates more jobs and higher wages for Americans. It’s time to give American workers the pay raise that they’ve been looking for many, many years,” the president said.
The third principle, he said, is tax relief for middle class families.
“Fourth and finally, we want to bring back trillions of dollars in wealth that's parked overseas. Because of our high tax rate and horrible, outdated, bureaucratic rules, large companies that do business overseas will often park their profits offshore to avoid paying a high United States tax if the money is brought back home, so they leave the money over there,” he said.
Trump told the crowd that if Sen. Claire McCaskill (D-Mo.) doesn’t help pass tax reform, they should vote her out of office.
Meanwhile, House Speaker Paul Ryan (R-Wis.) issued a statement Wednesday, saying the president “is taking the case for tax reform straight to Main Street.”
“Here in the House, we’ve made it clear that our top priority this fall is reforming the tax code and cutting people’s taxes. Right now, our tax code is burdensome, incomprehensible, and puts American businesses at a severe disadvantage on the world stage,” Ryan said.
“We want American companies to hire here and make things here. We want Americans to be able to keep more of their hard-earned money. That’s why we are committed to reforming the tax code and why President Trump reiterated his commitment today in Missouri. We are united in our determination to get this done,” he said.